16 Jul 2008

US economy still at risk - Bernanke

3:38 pm on 16 July 2008

The head of the United States central bank has warned there are still what he calls "downside risks" to economic growth in the world's largest economy.

In remarks to the US Senate Banking Committee on Tuesday, Federal Reserve chairman Ben Bernanke said rising energy and food prices are raising inflation risks.

Dr Benanke also said that financial markets and institutions are under great stress.

He stressed that the outlook for economic growth and inflation was unusually uncertain.

The Fed has raised its inflation forecast to a range of 3.8% - 4.2%, up substantially from its previous projection of 3.1% - 3.4%.

Later, President George Bush said the US economy is remarkably resilient, but he urged Congress to pass legislation as soon as possible to provide help for homeowners.